Civil Defence Minister Nikki Kaye made the announcement yesterday morning, saying the funding would be available to help those affected by the city's flooding earlier this month.
''There will be families who are feeling the financial impact on top of the emotional experience of dealing with the floods, and we want to help those families through this,'' Ms Kaye said.
The Government's funding would add to the $150,000 already contributed by the council, and the $12,553.20 raised so far by the Dunedin Flood Appeal, including $5000 from Mayor Dave Cull's discretionary fund.
More money was expected to be added to the fund when volunteers conducted a street appeal tomorrow. The Government's contribution was welcomed by Mr Cull, who said in a statement he was ''grateful and thankful'' for the help.
''This money will go a long way towards helping members of our community who need it most and will support those who are struggling to get back into clean, dry homes.''
Mr Cull was not available for further comment yesterday, but deputy mayor Chris Staynes said the donation recognised the impact of the floods on a ''concentrated slice'' of Dunedin's population.
''The fund will be a further boost to the residents that don't have insurance or other funding to cover the water damage caused by the flood. We warmly appreciate the move by the minister.''
The Mayoral Relief Fund is aimed at helping people cover the cost of essentials, including furniture and fittings, heating, temporary accommodation, one-off medical costs and establishment fees for phone connections.
Council recovery manager Simon Pickford said the council had already received about 20 formal applications for financial assistance from the fund, although that number was expected to rise.
''We are anticipating we will receive hundreds of applications, but it will take time for these to come through as people gather quotes for replacing items ... which is one of the fund's criteria.''
The exact amount already distributed was not available yesterday, but Mr Pickford said the Government's contribution meant the fund was now expected to be sufficient to help those most in need.
''The fund we have is finite but we are confident it will meet the most acute needs that it is designed for.''
On June 3, 175mm of rain was recorded in 24 hours. Across Dunedin, 1250 properties were affected.
About 280 were identified as having the greatest need, while another 973 had been flood-damaged to varying degrees.
''The people identified as having acute problems are the people with the greatest need. They have no insurance but have been badly affected by flood damage. Due to personal circumstances, it will be hard for some of these people to bounce back.
''Some are still living in wet and damp conditions, while others are people who moved south to avoid the trauma of the Christchurch earthquakes, so it has been another blow for them to deal with,'' Mr Pickford said.
The council's recovery assistance centre, inside the Church of Christ Hall in South Dunedin, closed its doors yesterday.
Mr Pickford said the number of visitors had dropped to just a ''handful'' in recent days, meaning it was no longer viable to keep the centre open and staffed.
Anyone with questions or issues was encouraged to call the council office on (03) 477-4000, he said.
